Hundreds of campaigners have reportedly marched outside Parliament in a demonstration against new off-payroll working rules which are due to come into effect from April this year.
The #StoptheOffPayrollTax campaign warns that the rules will damage the economy as employers cut back on investment and ongoing projects and contractors take their work abroad.
The legislation, officially known as IR35, will hold employers to account for determining a contractor’s employment status. The new rules will also make employers liable for any underpaid tax should they incorrectly determine a contractor’s employment status.
Commenting on the new rules, IPSE’s Deputy Director of External Affairs Andy Chamberlain, said: “The IR35 changes which are due to come in April are already causing devastation. Businesses are being forced to close due to clients not understanding the off-payroll rules and there’s a good reason why they don’t understand them – because nobody understands them.
“The rules are so complicated that the hiring organisations that have to apply them are saying they are no longer going to use contractors and that’s bad for self-employed businesses, bad for clients they work with and bad for the economy as a whole.”
But HM Revenue & Customs (HMRC) argues that the changes will “increase compliance” with the existing off-payroll working rules by making “organisations in all sectors of the economy” become responsible for assessing the employment status of “Individuals who work for them through their own limited company”.
Notably, the new rules will not affect small and medium-sized enterprises (SMEs) who do not meet at least two of the following criteria:
- The company has a turnover of £10.2 million or more
- The company has a balance sheet total of £5.1 million or more
- The company has 50 employees or more
It has also recently been revealed that the rules will only apply to payments made for services provided on or after 06 April 2020. Previously, the rules would have applied to any payments made on or after 06 April 2020, regardless of when the services were carried out.
To access the off-payroll working rules factsheet, click here.
For help and advice complying with the new off-payroll working rules, please get in touch with our expert team.